As Trump moves to renegotiate NAFTA, MEDC exec predicts changes to country of origin rule

McALLEN — Mangoes, onions, limes and avocados were loaded and unloaded onto truck after truck Thursday at the McAllen Produce Terminal Market just hours after the Trump Administration notified Congress of its intent to renegotiate the North American Free Trade Agreement.

It was business as usual at the produce terminal. Workers marked off new shipments, wheeled produce onto trucks and sipped sodas under the blazing sun.

“It’s different to say all these things and another to live it,” said Joe Caraza, a salesman at Treal Herbs and Spices, while holding shipment receipts.

U.S. Trade Rep. Robert Lighthizer expressed intent to renegotiate the two-decade old agreement in a one-page letter to Congress on Thursday. This was first formal step the administration has taken to renegotiate NAFTA, which is often credited with transforming the Rio Grande Valley. Thursday’s notification triggers a 90-day clock before the United States can sit down with Mexico and Canada. Between Thursday and mid-August, the Trump Administration is expected to meet with members of Congress as well as stakeholders.

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The interior of a warehouse under construction for ScanTech Sciences, a developer, manufacturer and operator of food treatment systems and facilities, is seen Thursday in McAllen. It will be ScanTech's second building in the Sharyland Business Park as it expands operations on the border.

Pineapples are seen at the McAllen produce terminal Thursday, May 18, 2017. Delcia Lopez dlopez@themonitor.com

U.S. Rep. Filemon Vela, D-Brownsville, reacted cautiously to the notification.

“Today’s Congressional notification by the Trump Administration of their intention to re-open the NAFTA agreement comes at a time when our partnership with Mexico is strained by President Trump’s words and actions,” Vela said. “While there may be a need to update NAFTA to reflect technological advancements, it is critical that we not disrupt the underlying fundamentals of the important trade relationship with our ally Mexico. Mexico is our nation’s third largest trading partner, and trade with Mexico supports five million jobs in this country of which 382,000 are in my home state of Texas.”

“NAFTA is vitally important to the state of Texas, with free trade adding billions of dollars to our economy annually,” Cornyn said in a statement. “We have a great opportunity to improve and modernize this landmark agreement. By updating NAFTA, we can address modern-day challenges without sacrificing economic prosperity.”

Gonzalez called on the administration to work with Congress to help create jobs and grow the South Texas economy.

Cuellar explained how he’s been working to improve the trade deals.

“I hope the administration plans to negotiate in good faith with our friends Canada and Mexico,” Cuellar said in a statement. “We have an opportunity to bring the deal into the 21st century by looking at the work we did for the Trans-Pacific Partnership agreement.”

“If the Trump administration is sincere, I am more than ready to roll up my sleeves and work with them, to forge a deal that boosts American jobs,” Cuellar added.

Keith Patridge, president and CEO of the McAllen Economic Development Corporation, said he thinks there will be changes regarding the country of origin marking rules.

“Right now a company could move out of the U.S. or Canada into Mexico and establish operations in Mexico, could build the product and still have duty-free movement into Canada and the U.S market,” Patridge said. “That’s perceived from all countries as not being fair. I think that’ll be addressed.”

But besides that, and other marginal modernizations, he said he doesn’t see many substantial changes.

“I think that it won’t be as drastic as people thought,” Patridge said.